CMS to pay $1.2M to Montana insurer in canceled cost-sharing reduction payment lawsuit

CMS was ordered to pay Montana Health Co-op more than $1.2 million after a federal court ruled the agency must make cost-sharing payments to the insurer despite Congress providing no funding, according to an Oct. 5 final order.

The order follows a Sept. 4 ruling in which Judge Elaine Kaplan of the Court of Federal Claims said health insurers are entitled to unpaid cost-sharing reduction payments, which were established under the ACA to help insurers subsidize the cost of coverage for low-income Americans.

In her ruling, Ms. Kaplan said "the statutory language clearly and unambiguously imposes an obligation on the Secretary of HHS to make payments to health insurers that have implemented cost-sharing reductions on their covered plans as required by the ACA."

The Trump administration moved to end cost-sharing reduction payments in October 2017. The $1.2 million payment is the amount Montana Health Co-op was owed in the fourth quarter of 2017, just after the payments were halted.

The decision may affect several other lawsuits involving cost-sharing reduction payments.

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